2000-24139 RESO
RESOLUTION NO. 2000-24139
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE
RECOMMENDATION OF THE CITY MANAGER TO ENTER INTO AN
AGREEMENT FOR ONE-YEAR WITH KPMG FOR AUDITING SERVICES
IN AN AMOUNT NOT TO EXCEED $147,500; REJECTING ALL
PROPOSALS RECEIVED IN RESPONSE TO REQUEST FOR PROPOSALS
(RFP) NO. 113-99/00; AND AUTHORIZING THE ISSUANCE OF A
REQUEST FOR PROPOSALS FOR AUDITING SERVICES.
WHEREAS, the City's General Purpose Financial Statements of the City Comprehensive
Annual Financial Report (CAFR) for fiscal year ending September 30, 2000, must be audited; and
WHEREAS, the audit engagement will also include audits of the Miarni Beach
Redevelopment Agency and the City's Parking Enterprise Fund, the Fire and Police Retirement
System, the General Employees Retirement System and the Unclassified Employees and Elected
Official Retirement Systems; and
WHEREAS, on June 28, 2000, the Mayor and City Commission adopted a resolution
authorizing the issuance of a Request for Proposals (RFP) for auditing services to examine the
City's General Purpose Financial Statements of the City's Comprehensive Annual Financial Report
(CAFR); and
WHEREAS, there did not exist proper and reasonable notice of the Evaluation Committee's
meeting, as required by the Government in the Sunshine Law; and
WHEREAS, due to the need for an audit of the City's General Purpose Financial Statements
of the City Comprehensive Annual Financial Report (CAFR) for Fiscal Year ending September 30,
2000, the Adminstration would recommend that the Mayor and City Commission reject all proposals
received in response to RFP No. 113-99/00; and further authorize the Administration to enter into
negotiations and contract with KPMG for auditing services for a one-year period, pending the
issuance of a new RFP.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission herein accept the recommendation ofthe City Manager to enter into an agreement
for one-year with KPMG for Auditing Services in an amount not to exceed $147,500; rejecting
all proposals received in response to Request for Proposals (RFP) No. 113-99/00; and authorize
the issuance of a Request for Proposals for Auditing Services. APPROVED AS 10
FORM & LANGUAGE
PASSED and ADOPTED this 18th day of October, 2000. & FOR EXECUTION
ATTEST:
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MAYOR
CITY CLERK
SECTION II . SCOPE OF SERVICES
The original engagement shall include such funds and groups of accounts contained in the City's
CAFR except for the financial statements of the Miami Beach Redevelopment Agency, The Fire and
Police Retirement System, the General Employees Retirement System and the Unclassified
Employees and Elected Officials Retirement System. These component units are audited under a
separate cover and have been included as additive alternates, subject to their Board's approval, in this
RFP.
The auditors should express an opinion on the fairness of the presentation of the City financial
statements in accordance with generally accepted auditing standards and performed in compliance
with Federal, State and City orders, statutes, ordinances, resolutions, bond covenants, rules and
regulations which may pertain to the work required in the engagement. The auditors will provide
guidance with the implementation of GASB34 and will examine the financial statements as required
in conformity with generally accepted accounting prinCiples.
An evaluation is to be made of the system of internal control to assess the extent that it can be relied
upon to insure accurate information and compliance with laws and regulations and to provide for
efficient and effective operation. The study of internal control should include a review of the system
and test of compliance.
A review is to be made of the information technology operations of the City and controls to assure
protection of files and prevention of processing errors.
The auditor shall prepare the Report of Independent Certified Public Accountants for inclusion on
the CAFR. The auditor shall also submit the following reports for inclusion in the report to the
Auditor General: Report of Independent Certified Public Accountants, Report of Independent
Certified Public Accountants on Compliance and Internal Controls, Management Letter, and
Memorandum of Accounting Procedures and Internal Controls (as needed).
The auditor shall prepare the following reports and schedules as required for the Single Audit
Report:
. Table of Contents for Single Audit
. Report of Independent Certified Public Accountants in compliance with requirements
applicable to each major program and on internal control over compliance in accordance with
OMB Circular A-B3.
. Notes to Schedule of Expenditures of Federal Awards
. Schedule of Findings and Questioned Cost
. Report of Independent Certified Public Accountants on Examination of Management
Assertion about Compliance with Specified Requirements of State Financial Assistance
. Management Assertion Reports
12
The auditor shall also prepare a management letter which shall contain the audit findings which may
include the following material items discovered within the scope of the audit:
. Whether errors or irregularities in the preceding audit report have been corrected;
. Whether recommendations made in the preceding audit report have been followed;
. Recommendations to improve management, accounting procedures, internal controls, and
increase efficiency;
. Violation of the laws, rules and regulations discovered within the scope of the audit;
. Improper or inadequate accounting procedures;
. Failure to properly record financial transaction;
. Other inaccuracies, irregularities, shortages and defalcations, if any, discovered by the
auditor.
13
SECTION IV - EV ALVA nON/SELECTION PROCESS: CRITERIA FOR EV ALUA TION
The procedure for proposal evaluation and selection is as follows:
I. Request for Proposals issued.
2. Receipt of proposals.
3. Opening and listing of all proposals received.
4. An Evaluation Committee, appointed by the City Manager, shall meet to evaluate each
proposal in accordance with the requirements of this RFP. If further information is desired,
proposers may be requested to make additional written submissions or oral presentations to
the Evaluation Committee.
5. The Evaluation Committee shall recommend to the City Manager the proposal or proposals
acceptance of which the Evaluation Committee deems to be in the best interest of the City.
Proposals will be evaluated on the basis of the following criteria:
*
Firm's Experience in Auditing Services
*
Qualifications of Project Team
*
Methodology and Approach
*
Previous Similar Projects
*
References Provided by Prior Clients
*
Fees
6. After considering the recommendation(s) of the Evaluation Committee, the City Manager
shall recommend to the City Commission the proposal or proposals acceptance of which the
City Manager deems to be in the best interest of the City.
7. The City Commission shall consider the City Manager's recommendation(s) in light of the
recommendation(s) and evaluation of the Evaluation Committee and, if appropriate, approve
the City Manager's recommendation(s). The City Commission may reject City Manager's
recommendation(s) and select another proposal or proposals. In any case, City Commission
shall select the proposal or proposals acceptance of which the City Commission deems to be
in the best interest of the City. The City Commission may also reject all proposals.
18
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
http:\\ci.miami-beach.fl.us
COMMISSION MEMORANDUM NO. ~ 14-00
TO:
Mayor Neisen O. Kasdin and
Members of the City Commission
DATE: October 18,2000
FROM:
Jorge M. Gonzalez
City Manager
~
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE
RECOMMENDATION OF THE CITY MANAGER TO ENTER INTO AN
AGREEMENT FOR ONE-YEAR WITH KPMG FOR AUDITING SERVICES
IN AN AMOUNT NOT TO EXCEED $147,500; REJECTING ALL
PROPOSALS RECEIVED IN RESPONSE TO REQUEST FOR PROPOSALS
(RFP) NO. 113-99/00; AND AUTHORIZING THE ISSUANCE OF A
REQUEST FOR PROPOSALS FOR AUDITING SERVICES.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
FUNDING
$ 99,500
18,000
15,000
15.000
$147,500
General Fund
Parking Enterprise Fund
Convention Center Enterprise Fund
Redevelopment Agency
Total
ANALYSIS
The primary purpose of the audit is to examine the City's General Purpose Financial Statements of
the City Comprehensive Annual financial Report (CAFR) for fiscal year ending September 30,
2000. The cDntract will be for a period of one year.
This audit engagement will also include audits of the Miami Beach Redevelopment Agency and the
City's Parking Enterprise Fund. The Fire and Police Retirement System, the General Employees
Retirement System and the Unclassified Employees and Elected Official Retirement Systems are
component units and as such, their audits are subject to selection and approval by their respective
Boards.
FUNDI
nd Budget
AGENDA ITEM k- I P
DATE 10 -I ~- DO
RFP No. 113-99/00
Page Two
October 18, 2000
ANALYSIS (continued)
On June 28, 2000, the Commission adopted a resolution authorizing the issuance of a Request for
Proposals (RFP) for auditing services to examine the City's General Purpose Financial Statements
of the City's Comprehensive Annual Financial Report (CAFR). Additionally, the Commission
requested that the Audit Committee review the RFP prior to the issuance.
Since most members of the Audit Committee were out oftown, Audit Committee member Laurie
Holtz reviewed the RFP on June 29, 2000, and had neither comments nor changes.
On July 7, 2000, the City's Finance Committee accepted Mr. Holtz's review and authorized the
RFP to be issued.
The RFP was issued July 12,2000, with an opening date of July 31, 2000. DemandStar.com issued
notices to 107 firms resulting in the request for ten (10) proposal packages and the receipt of three
(3) proposals.
Letter to Commission (LTC) number 151-2000, dated August 2, 2000, appointed the following
individuals to serve on the Evaluation Committee (the Committee) to evaluate the proposals
received:
Larry Herrup, CPA, Budget Advisory Committee
Jeryl (DeDe) Weithorn, CPA, Budget Advisory Committee
Mark Gidney, CPA
Patricia Walker, CPA, Finance Director, City ofMiarni Beach
James J. Sutter, CPA, Internal Auditor, City of Miami Beach
The Committee met on August 7, 2000, and proceeded to review the three proposals received and
evaluate the responses in accordance with the criteria listed in the RFP.
Two of the firms KPMG, and Ernst & Young made proposals on the CAFR audit along with
proposals on the individual component units. The third firm of Rodriguez, Trueba & Co., only made
a proposal on the individual component units.
The Committee decided to: (I) Separate the RFP; (2) award audit services for CAFR and related
CAFR component units; and (3) award audit services for pension component units.
The RFP included six (6) evaluation criteria consisting of the following: (I) Firm's Experience in
Auditing Services; (2) Qualifications of Project Team; (3) Methodology and Approach; (4) Previous
Similar Projects; (5) References Provided by Prior Clients; and (6) Fees.
RFP No. 113-99/00
Page Three
October 18, 2000
ANALYSIS (continued)
Each member ranked the proposals, with the final ranking determined by the committee as follows:
I. Awarding of audit services for CAFR and CAFR related component units:
1. KPMG
2. Ernst & Young
II. A warding of audit services for pension component units:
1. Ernst & Young
2. KPMG
3. Rodriguez, Trueba & Co.
The Committee recommended that the Administration negotiate with the top ranked firm ofKPMG
for a consolidated price on the audit services for the CAFR and CAFR related components. The
contract should not exceed $147,500 for the fiscal year ending September 30, 2000. If the first
ranked firm carmot come to agreement, then the second ranked firm, Ernst & Young will be awarded
the contract.
Subsequent to the Committee meeting, the following issues were raised:
1. Should all component units be contracted for the Fiscal Year 1999/00 audit?
It was confirmed that the pension component units have an existing audit firm contracted to
do the Fiscal Year 99/00 audit. Therefore, it is recommended that the action of the evaluation
committee for this portion of the award be rejected and not awarded.
2. Was public notice given as required by the Government in the Sunshine Law?
No. The Government in the Sunshine Law required that proper and reasonable notice of the
committee's meeting be provided. Therefore, it is recommended that all proposals received
in response to RFP 113-99/00, be rejected.
3. Should we enter into an engagement with responsible and qualified Auditing firm now
or wait for the reissuance of an RFP?
We should do this now because of the time constraints of the City's reporting and continuing
disclosure requirements. Even an expedited evaluation process would create an extremely
short time frame for a new firm to become familiar with the City's financial systems and
records, and complete the audit on a timely basis. Additionally, compressing this process
would require an extraordinary level of support from the Finance Department during a time
when many other priorities must be addressed.
RFP No. 113-99/00
Page Four
October 18, 2000
ANALYSIS (continued)
4. Should a new RFP for Auditing Services be issued?
Yes. Although Section 287.057(1)(1), Florida Statutes, exempts Auditing services from a
formal competitive sealed bid process, it is a good practice to competitive select Auditing
services.
Attached is the proposed Scope of Services and Evaluation Criteria to be used for the re-issuance
of the RFP. The Administration expects to pursue this issuance in the spring of 200 I, with an
anticipated award date of early summer.
Based on the analysis contained herein, and the need for an audit of the City's General Purpose
Financial Statements of the City Comprehensive Annual Financial Report (CAFR) for fiscal year
ending September 30, 2000, the City Commission should authorize the Administration to enter into
negotiations and contract with KPMG for auditing services for a one-year period.
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